Real Estate Investor Magazine South Africa September 2015 | Page 51

Astute REITs like Cubesmart and Sovran Self-Storage are currently on an acquisition spree in the US, in order to consolidate the large number of privately owned mom ‘n pop stores. It appears that the high level of fragmentation in the self-storage sector leaves investors with plenty of runway for superior investment returns. Data Centre REITs Data Centres are another prime example of innovation in the REIT industry. Increased regulation surrounding disaster recovery planning has spurred companies to outsource their data storage to independent, specialist operators like NASDAQ-listed CyrusOne. Data Centre REITs are highly specialised REITs that satisfy the non-stop and ever increasing demand for data storage. Their tenants are household names such as Facebook and Google. These businesses are highly ‘capital intensive’ compared to traditional property types and are required to power, cool and provide security to the mission critical nature of data stored in the buildings. Inside a Data Centre facility Specialist REITs like Self-Storage and Data Centre operators are innovative investment opportunities available to property investors on listed stock markets. They ultimately provide investors the opportunity to diversify their income streams by investing in differentiated property types that are well positioned for future growth. REIT INVESTMENT BENEFITS • Diversification: Long-term Equity REIT returns have shown little correlation to the returns of the broader stock market. • Dividends: Stock exchange-listed REITs have provided a stable income stream to investors. • Liquidity: Stock exchange-listed REIT shares can be easily bought and sold. • Performance: Over most long-term horizons, stock exchange-listed REIT returns outperformed the S&P 500, Dow Jones Industrials and NASDAQ Composite. • Transparency: Stock exchange-listed REITs operate under the same rules as other public companies for securities regulatory and financial reporting purposes. RESOURCES Reitway Global, Thomson Reuters Datastream, https://www.reit.com www.reimag.co.za SEPTEMBER 2015 SA Real Estate Investor 49